31 thoughts on “Sandpit

  1. Hey JQ; a suggestion for a new post. I’d like to talk about Rudd’s decision to transition to a floating carbon price 1 year earlier than planned, linked to the dysfunctional European market. If, as the pundits are predicting, this results in an average price between $6 and $10, this will mean that most of Abbott’s work will be done for him, and that carbon policy will be effectively too weak to change behaviour. On a PPE basis (proof of the pudding is in the eating), Gillard’s climate policy has so far been much better than Rudd’s.

  2. Indeed Sam! Problem could be that JQ is on the Climate Authority (IIRC?) ie the body that’s suppose to provide the government with such targets to base policy on, so he could be reluctant to comment on things just yet.

  3. If I recall Pr Q has said that the carbon price should be nearer $50 thereby creating a rationale for the RET as $23/24 is too low. Noting that new wind power is still twice as levelised-costly as already built but carbon taxed coal generation. Nukes of course stay banned. Therefore retreating from $24 to say a European ETS style $6 is heading in the wrong direction.

    The level of debate on carbon mitigation is turning into a race to the bottom. Now it seems to be about a create big new invisible substance. The other chap wants to knock a few measly percent off power bills that have doubled since he first came to office. For me it’s Katter or Palmer for PM.

  4. I wonder what rudd’s backdown will do to the green vote. they need a boost in SA and WA.

    greens should take the last seat in vic, nsw and tassie. katter will take last seat in QLD.

  5. @Sam

    The problem Sam is that Gillard was moving to the same point PMKR is proposing now anyway — just one year later. That’s not a significant difference in terms of infrastructure investment. If moving to an ETS linked to the Europeans is inadequate, then whether this occurs in 2014 or 2015 is neither here nor there.

    Now Penny Wong has hinted that the industry compensation may go — which would make the package a little stronger. There should also be a lower cap — one aimed at reducing emissions to 1990 * 0.8 by 2020. That would force up the price.

    Likewise, there should be a phase out of tax deductibility of fossil-HC inputs to business. By 2020, these should not be deductible.

    And of course fossil-HC subsidies (eg the diesel fuel rebate) should be withdrawn. Currently the household assistance package looks as if it will be rather too generous after July 1 2014 so there is some space to eat into that by clawing back in other ways. If they fail to claw it all back, it will operate as a mild stimulus — which would be no bad thing.

  6. I definitely can’t comment on the 2020 target, since the Climate Change Authority is inquiring into that right now – still time to make submissions, I believe.

    Otherwise, Fran is right – the link to the EU scheme, announced last year, was the really big change. Although there are arguments both ways, I think this was the right way to go. Climate change is a global problem and a necessary condition for solving it is a bigger reduction in EU emissions than they have committed to so far. If that happens, the price will rise to a more reasonable level.

    It’s worth pointing out though, that the repeated price slumps in the EU market are mainly due to repeated surprises at how easy it has been to meet seemingly ambitious targets.

  7. The EU scheme has underperformed (in CO2 terms) because of the plethora of grandfathered permits and the lavish use of questionable carbon credits. I’ve previously given links to the Chinese CFC scam that created over $1bn worth of EU offsets. Another was a slightly more efficient than otherwise coal station that bizarrely generated credits while increasing total CO2. We should keep our distance from such hare brained thinking.

    OTOH if the EU had its act together we could form a customs union along with Nordic countries, California, South Korea and others. That union could impose carbon tariffs on foot dragging nations like China, a country which is now burning half the world’s coal with little sign of serious reform. Dirty deeds done dirt cheap.

    A couple of months ago Climate Spectator opined that the effective incidence of carbon tax was 10% so the real carbon price was $2.30. A Europe linked ETS might work better if the giveaways are pared back. For example smelters got 94.5% exemption from carbon tax. This time make them pay $6 or whatever.

  8. My prediction FWIW. The world will do nothing substantial and fossil fuel burning and greenhouse gas emissions will continue to rise until limited by actual scarcity of fossil fuels OR until limited by economic damage and extended depression caused by climate change, general resource shortages and austerity (pro-cyclical) economic policies. By that time disastrous global warming (from the point of view of maintaining current human economic and social systems) will be locked into the climate system.

    Kevin Rudd is an extreme disappointment too but then what did I expect? The central problem now is our economic system itself. The power to act is concentrated in the hands of those who have no intention of acting because they make their wealth from the current power systems, political, economic and energetic. Any change would leave them with large stranded assets and a great loss of financial and political power. They have no intention of allowing that.

    Capitalism historically was an engine of change and progress. There is no doubt about that. It removed the Ancien Regime and cancelled the feudal relations of Europe. When moderated by labour, religious and other movements it allowed development and achivement of social as well as economic goals. However, late stage corporate and plutocratic capitalism has now become a reactionary system stuck in the fossil fuel burning age. It is the system now holding us back and preventing the new changes and progressions which are desperately required.

  9. @Hermit
    “A couple of months ago Climate Spectator opined that the effective incidence of carbon tax was 10% so the real carbon price was $2.30.”

    I suspect (but can’t say for sure) that most of this effect was caused by the exclusion of transport fuel. Unless Rudd is prepared to incorporate petrol and diesel, the effective incidence will remain fairly low.

    @John Quiggin
    “Climate change is a global problem and a necessary condition for solving it is a bigger reduction in EU emissions than they have committed to so far. ”

    That’s true, but there’s little evidence of Australia’s ability to foster multilateral climate action. By contrast, our unilateral effort was working very well. By imposing a high carbon price and setting a good example, we were taking the wind of the sails of European Tony Abbotts.

    “It’s worth pointing out though, that the repeated price slumps in the EU market are mainly due to repeated surprises at how easy it has been to meet seemingly ambitious targets.”

    And also due to repeated surprises about ongoing European economic weakness. Really, the Austerians are the greatest environmental heroes here.

  10. @TerjeP

    Would the Greens support a reduction in the CO2 price?

    Our interest in the CO2 price is extrinsic. Our opinion of the explicit price reflects the role it plays in making the reductions in emissions on a world scale we regard as adequate. If that price were $0.10per tonne, I suspect we’d be fine with that. Of course, that’s not going to do the job that needs to be done, this side of some very dramatic direct investments in low footprint technology by the state and probably some serious regulatory measures. That would mean that while the explicit price was $0.10tCO2e the implicit price might be $100 or a lot more than that.

    I’m of the view that a portfolio of measures is needed. The price functions as a kind of scaffold, catching all those that slip through the regulatory loop and direct investment measures. We need direct investment in low footprint technology from the state and some regulatory measures backed by serious financial sanctions requiring a reduction in CO2e effluent from industrial, transport and agricultural usages and an increasing substitution of low footprint energy inputs in our domestic and tradeable sector goods and services provision.

    I see the rapid phase out of tax deductibility of fossil HC inputs to business as underpinning this latter shift. If businesses have to pay for dirty energy out of after tax income there is going to be a demand by the end users for an increasing proportion of the power and energy goods they are supplied to be low-footprint.

  11. “mainly due to repeated surprises at how easy it has been to meet seemingly ambitious targets”

    I think you will find it is mainly due to how easy it is to out source its emissions and greatly increase its scope 3 emissions.

  12. Iain, most of Europes carbon emissions come from electricity generation, transport, and heating. These are things it’s not possible to manufacture in China and ship over.

  13. TerjeP, I don’t think Greens are hung up on the carbon price, I think the sticking point is the target for emissions cuts. It has been demonstrated that cutting emissions is cheap so if we kept the $24.15 carbon price we would definitely far exceed the inadequate 5% emissions cut target for 2020.

    And since we are in the sandpit, do you accept that Andrew Bolt was lying when he wrote:

    “Here he was, receiving film’s highest honour for his smash documentary, in which he warns that within a century the seas will rise up to 6m while monster hurricanes tear through what’s left of our cities.

    Never mind that scientists reject such wild claims.”

  14. @Ronald Brak
    UK researchers conclude that a quarter of global emissions are embodied in traded goods (code for made in China) and that figure is growing. Source UK National Academy of Sciences or Carbon Trust April 2011. That means industries are departing trendy anti-carbon economies and springing up in China. That country gives lip service to emissions cuts but never quite seems to get around to it. Not that they are having a quiet laugh at the West.

    In my opinion a 5% cut years 2000-2020 is pathetic. Since the DCEE Climate Factbox suggest 80% for 2000-2050 prorata 2020 should achieve 32%. We cut just 1% 2000-2012. The 5% target is even more shameful given our hypocritical coal exports and high per capita emissions. Akin to a crack dealer teaching Sunday school.

  15. There are personalities, political tactics and then there are policies. There is a question as to whether it is advisable for any Opposition to release policies details before the election. Oppositions should, at least, have worked out policies, otherwise they are not in engage in government. Fightback, did not work out for John Hewson, but at least in 1992 it was possible to go to the library and read it.

    I was hoping this election would primarily be about competing policies and implicitly the differing values that under-girded them. The electoral propaganda campaign will inevitably be directed to the marginal seat campaigns, which I refuse to take any notice of whatsoever.

    Of all the issues, the most important is climate change, which requires local, national and international actions. There has been far too much climate change already, let alone as to what will develop from existing warming. Every product should be required to specify what energy source was used in its production, and standards as to what an acceptable use of fossil fuels are in its production.. The same should apply to every electricity bill. I am wondering if this would be doable.

  16. I dont mind the idea of a tax rather than an ETS . It looks like either way we may not be moving fast enough . Since all the oil extracting and burning systems and infrastructure are already in place and well developed I find it really hard to imagine that any at all will be left in the ground .Somewhere sometime it will get used .

  17. The left will have to vote for abbott now that rudd will overtake him from the right on any issue. Power without glory

  18. @Megan remember that rudd has to win seats from the liberals to return to government, and not lose more inner city seats to the greens because of recent sell-outs. in a narrow election, the greens could hold the balance of power

    anthony green’s elections blog is yet to discuss the green’s chances of picking up more seats in the house on liberal preferences.

  19. Ikonoclast, with regards to carrying capacity, you kindly supplied a definition. How would you apply that definition? If we took a more or less blank slate, say Antartica, and used the definition you provided:

    “The carrying capacity of a biological species in an environment is the maximum population size of the species that the environment can sustain indefinitely, given the food, habitat, water and other necessities available in the environment. In population biology, carrying capacity is defined as the environment’s maximal load,[1] which is different from the concept of population equilibrium.

    For the human population, more complex variables such as sanitation and medical care are sometimes considered as part of the necessary establishment.”

    How can we use that definition to work out what the carrying capacity of Antartica is given the human habit of using technology? Is it a few hundred living off clubbed penguins and seals? Is it hundreds of thousands fed by fishing fleets? Or is it billions living off of food grown in modular hydroponic gardens covering the ice cap, powered by the sun and wind turbines? Or an even greater number living off nutrients produced in vats?

    At the moment there is no way I can use the definition to come up with a number. And if we did come up with a number, what would we do with it? If we decided on how to work out a number and it came out as less than the current population of Australia would that mean we should knock off enough Australians to get the population below the carrying capacity? Should we have enforced sterilization? Or should we do nothing as Australia’s birth rate is below replacement rate anyway? And what about the world as a whole? If world population is above its carrying rate should we murder people to get their numbers down, sterilize people by force, or since getting rich gets people through the demographic transition and makes their birth rate drop below replacement levels should we instead try to eliminate poverty? Personally the latter option appears best to me, but I have to admit that’s only because I ethical qualms about commiting acts of unmitigated evil.

  20. Ronald,

    It is a long time since I watched the Al Gore movie. And I have not read the Andrew Bolt comment in context (at least not recently). However the IPCC prediction for sea level in 2100 under the BAU scenario is in the order of something like 0.5 metres at the upper limit. So it would seem a bit dubious to claim 6 metres.

    As such I don’t accept the claim that Andrew Bolt was lying. However I’m not going to watch the Al Gore movie again to try and prove it.

  21. Thank you for your reply, TerjeP. I guess my question now becomes which do you think is more likely, that Andrew Bolt is lying or that I am lying.

  22. Yes, Terje. Which option is more likely?

    Ronald Brack…Liar?
    Andrew Bolt….Liar?

    This is important!

  23. TerjeP, either Andrew Bolt or I am saying something untrue. As you are not going to look into if Bolt is lying I am curious to know who you think it more likely to be fibbing, me or Bolt.

  24. Rudd will go down in the polls because he sold himself as a conviction politician in 2007.

    He showed in 2010 with his backdown on the great big new tax and in 2013 with the PNG solution that he is just another opportunist.

  25. “Bolt has been taking advice on what style to adopt:-”

    So many Andrew Bolts. Which is the real one? Or is there a real one?

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